Business Taxes

Tips for Preparing for the S Corp Deadline

Tips for Preparing for the S Corp Deadline

Did you file your business as an S Corporation? If so, you likely know that the entity’s tax deadline is coming up quickly. March 15, 2021 is the deadline for filing annual tax returns for an S Corporation. 

What is an S Corporation and what are some of its filing requirements? Take a look at how S Corps may start preparing now to meet this tax filing due date.

What’s an S Corporation?

The IRS defines an S Corporation as a corporation that elects to pass corporate income, losses, deductions, and credits to its shareholders for federal tax purposes. Business income passes through to the individual owners of the S Corp. This ensures the company does not pay corporate income taxes. It also allows owners to legally avoid double taxation.

Recently, we blogged about the tax benefits of incorporating as a limited liability company (LLC). Much like an S Corp, an LLC also has a pass-through entity status. However, an LLC is not taxed by default as an S Corporation. LLCs are usually taxed by default as a sole proprietorship or partnership status. The LLC must alert the IRS about how to treat its business for tax purposes. If the entity wants to be taxed as an S Corporation, they need to qualify for S Corp status and then file an S Corp election.

Getting ready for the S Corp tax deadline.

What are the filing requirements necessary to file an S Corporation’s annual tax returns? Gather this paperwork prior to getting started.

File Form 1120S

Form 1120S is the U.S. Income Tax Return for an S Corporation. This form is used to report the income, gains, losses, deductions, and credits of a domestic corporation. Filing Form 1120S allows the S Corp to share its financial activity throughout the tax year with the IRS.

File Schedule K-1

An S Corporation files a copy of Schedule K-1 with the IRS. This reports the partner’s share of the corporation’s income, deductions, and credits. If you are a partner, or shareholder, in the S Corporation, you must complete this form and file it with Form 1120S.

Meet with a tax professional.

It is important to note that there is a tax filing extension available for S Corporations. The extended deadline is September 15, 2021.

Do you think you may need an extension to file your S Corporation? Do you have any other questions about the S Corp tax filing process? While we cannot provide tax advice, we do recommend that those filing annual tax returns meet with a tax professional. Talk to a trusted accountant or CPA about potentially filing a tax extension or to ask any other questions you may have prior to filing taxes as an S Corporation. Remember to meet with these tax professionals soon as March 15 is just around the corner for filing S Corp tax returns!

Deborah Sweeney is the CEO of MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Twitter @deborahsweeney and @mycorporation.

Photo by Christina @ on Unsplash

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